Apple to Offer Mobile Service, Analyst Predicts

Apple, which loves to control the user experience end-to-end, is reportedly planning to offer mobile wireless service. If the rumor is true, Apple will directly compete with AT&T, Verizon, and Sprint—wireless carriers that already sell service for and heavily subsidize user purchases of Apple’s iPhone.

Apple currently has the necessary distribution channels, digital content portfolio, and customer base to be successful as a wireless carrier, according to wireless industry strategist Whitney Bluestein, as quoted by Boy Genius Report. Bluestein made his comments at the Informa MVNO Industry Summit in Barcelona.

What’s more, Apple already has more than 250 million credit cards on file from iTunes customers. Apple also has patent-pending network architecture, for which it filed patents in 2006, Bluestein said.

“What has been holding Apple back from becoming a wireless provider already are the enormous handset subsidies paid by mobile operators, which amount to about $381 for each iPhone sold today,” Bluestein said. “That has been a short-term stumbling block for Apple, but the company has its well-known cash reserves and could seize the initiative at any point.”

Still, the move raises questions. Will Apple really invest billions in developing its own cellular network infrastructure? Could the company launch its own network and still keep its partnerships with AT&T, Verizon, and Sprint? And what about all the iPhone customers who are already locked into contracts with their carriers—does Apple expect them to eat the early termination fees just for the pleasure of living completely in Apple’s walled garden?

In other words, as with any Apple rumor, take this one with a big grain of salt.

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